Australians rush to sign up to the Federal Government’s First Home Loan Deposit Scheme
The applications for the Federal Government’s First Home Loan Deposit Scheme has revealed a surprising number of candidates in their 40s and 50s trying to crack into the market.
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Exclusive: Many hopeful first home buyers in their 40s and 50s are among the thousands of applicants who have rushed to sign up to the Federal Government’s new loan deposit scheme.
New figures from the National Housing Finance and Investment Corporation (NHFIC) showed of the first 3000 applicants 25 per cent are aged 35 or older.
And those dominating the First Home Loan Deposit Scheme — which allows borrowers to enter the market with just a five per cent deposit — are singles, accounting for more than 60 per cent applicants.
NHFIC’s chief executive officer Nathan Dal Bon said pre-approvals under the scheme have come from every state and territory across city and regional areas.
And many have incomes that fall well below the thresholds, finally giving those on lower incomes hope in buying their first property.
“The average income for applicants with pre-approvals is well below the threshold for both singles and couples, allowing those on a modest income to buy their first home,” Mr Dal Bon said.
The data showed of the applicants so far the median taxable income was about $68,000 for singles and $108,000 for couples.
Successful applicants cannot have a taxable income of more than $125,000 while for couples their income cannot exceed $200,000.
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The Commonwealth Bank and National Australia Bank are the only two big lenders offering loans via the scheme.
Another 25 smaller lenders will join the scheme from February 1, when an extra 7000 spots become available.
The scheme allows borrowers to front up with just a five per cent deposit saved up and the government will act as a guarantor for the remaining 15 per cent.
This means borrowers don’t have to pay the expensive lenders’ mortgage insurance (LMI) – a charge that protects the lender not the borrower if there is a default on the loan.
CUA is one of the 25 lenders which will be offering spots from next month.
Its chief executive officer Paul Lewis said inquiries about the scheme had already been received.
“If you are a first homebuyer, it’s a good time to research the details of the scheme to see if it can help you into your own home sooner,” he said.
“Look at how the price cap works for different cities and regions, to ensure you search for properties in the right price range and don’t set your sights too high.”
The Commonwealth Bank’s executive general manager Jason Chan said they had been inundated with applicants as soon as they started offering positions from January 1.
He urged potential borrowers to ensure they meet the requirements before going through the application process.
“You should also speak with a lender in branch or over the phone who will assess your application taking into account your finances, liabilities and household expenses and be able to answer any questions you might have,” Mr Chan said.
Originally published as Australians rush to sign up to the Federal Government’s First Home Loan Deposit Scheme
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